feel like it is below freezing tonight. let's talk about security. it's something we talk about every year, but it is mind-boggling the amount of security in place tonight. thousands of police officers, sharp shooters on rooftops, radiological scanners, explosives teams and tactics teams and firearms teams. unless you think it won't be safe here in times square, there will be surveillance cameras throughout. also, something you should know if you plan to come to times square, do not bring a large bag. do not bring a backpack or alcohol. you will not be allowed inside the perimeter. some of these people who are here early already, they're very smart. get here early. the streets around times square start to close at about 1:00 p.m. eastern time, so get here early. 1 million people expected to jam times square tonight, christine. it will be packed and freezing cold, and hopefully with all this security it will be safe. christine, happy new year.

>> thanks for watching. i'm christine romans following fiscal cliff all day and night. ashleigh banfield returning tomorrow. "newsroom with suzanne malveaux" starts right now. welcome back to "cnn newsroom." here's what's going on right now. ♪ 2013 hitting right now in bangkok, thailand. we're looking at live pictures there as the celebrations and the fireworks exploding there. lots of picture-taking and a lot of excitement there. right now pope benedict holding a new year's eve mass at st. peter's basilica. they will celebrate the new year in six hours. a couple of hours ago folks toasted 2013 in new zealand. check it out.

>> pretty cool. party started with fireworks with the auckland sky it tower. organizers were worried bad weather would be a problem, but everything turned out just fine. congratulations. the second major city to ring in the new year, sydney, australia. check it out. wow, that is over city harbor bridge. the show is huge. we are talking about seven tons of fireworks. happy new year's all around. of course, we are waiting as well when the clock strikes midnight in the united states, there's a locality of celebrating but there is some anxiety as well. what are we talking about here? that's because almost every one of us is facing a major tax hike in our 2013 pay economics if congress does not reach the

agreement on the fiscal cliff. right now there are still negotiations that are going on. they are being led by the vice president, vice president biden and senator minority leader mitch mcconnell. sources say that they are making some progress, but even if a deal is reached, no guarantee it's going to pass. listen to what one democratic senator, tom harkin, said on on the senate floor just earlier this morning. >> if we're going to have some kind of a deal, the deal must be one that really does favor the middle class, the real middle class, those making 30, 50, 60, $7,000 a year. that's the real middle class in america. as i see this thing developing, quite frankly as i've said before no deal is better than a bad deal, and this looks like a very bad deal the way it's shaping up. >> we want to bring in dana bash on capitol hill. when you think about it, both sides are not happy with what's taking place, at least what they're talking about. i know you have some new information on at least what the republicans are suggesting when

it comes to those massive spending cuts, some kind of delay in the process. how would that work? >> reporter: well, this is according to democratic sources. i want to be clear. congressional democratic sources saying that republicans specifically mitch mcconnell who is the lead negotiator, what he is proposing is to delay that sequester, the spending cuts for three months, so 90 days. what democrats here on capitol hill want to do is delay it for at least a year. so there is a very interesting dynamic shaping up right now. this probably is a good illustration of that. you you mentioned right at the top that the negotiations are going on now between primarily senate republican leader and the vice president, not the democratic leader. so they're certainly in the loop i'm told in a very constant way, the democrats here on capitol hill. but the fact that they let it be known to us that they're not happy with the idea of a three-month delay. they want it to be longer.

isn't just a signal to republicans. it's also a signal to their fellow democrat in the white house, namely vice president joe biden. that's just an example of how intricate, delicate and strange these negotiations are right now as we just get down to the wire. >> yeah. they are rather strange. do we think there's any movement on the president's part? you've been reporting the fact you've got the -- the number was originally 250,000, anybody making more than that would get a tax hike. now that's at potentially $450,000. there's some movement on the white house's part as well? >> reporter: it seems to be. as you said, we reported earlier today that democrats had put on the table, i believe, as early as saturday night the idea of moving that income threshold up to $450,000 a year. that is, we understand, still on the table. that's for households. jessica yellen at the white house is reporting that the number for individuals right now

is $400,000, meaning tax cuts for everybody up to those levels, $400,000 for an individual, $450,000 for a household would stay in place. for everybody else, the tax rates would expire. that's on the table we understand now, but things are changing so fast who knows if it is where the negotiations are really up happening. that's just one example. another thing is the estate tax, which is a very big deal, to a lot of people in this country, not just, you know, people who you normally think of as wealthy but farmers with big estates want to keep the tax threshold at a lower level, and we're told that democrats are seriously considering it and are open to that in a big way in the negotiations. >> we know the talks are continuing and both sides are weighing in on this. do we think the president in any way is also involved in this, or we're not quite at that level? >> reporter: it's hard to imagine he's not. it really is. so much is riding on this, and

he has so much riding on this, i should say, in such a big way. certainly all the polls show if things go south, most of the polls show a majority of americans blame republicans. he's still the president, and he is still no doubt if things really go south going to take a hit. just like everybody will. this is a very important issue to say the least. the vice president is a key negotiator because of his incredible ties to people here on capitol hill. the fact that he served on capitol hill as a senator himself for three decades, but it's hard to imagine the president isn't involved. you have to ask our white house people just to be sure about that. >> dana, we'll follow you and come to you often as the developments warrant on these talks. we certainly hope they can work something out. they are clearly, clearly running out of time. thank you, dana. the clock is ticking, 12 hours before we hit that fiscal cliff deadline. if a deal is not reached, how is it going to affect us? the tax policy center crunched numbers. here's a couple scenario.

if you're single with no kids and you make $50,000 a year, you you see your taxes go up by $1500. now, take a married couple with two kids making $100,000. they would see their taxes go up $5300 a year. i want to turn to christine patrolman m romans in new york to talk about the people that are really, really going to feel this immediately and it's going to have the greatest impact. who are they? >> the first people to feel it are on extended federal unemployment benefits. for them, for 2 million of them suzanne, on december 29th, that was the end of the last week of unemployment benefits for them. so immediately hundreds of dollars a week of unemployment benefits go away. for everyone else, anybody who works at a company and pays payroll taxes, your taxes will rise. it looks like that will happen no matter what. your pay dhek will be p smaller no matter what because the

payroll tax withheld will rise for income up to $113,000. early tax refunds will be delayed. the irs has been talking about that. on the unemployment benefits front, i'm going to be honest with you. i've talk to people on extended benefits and they're very, very concerned about this. one woman i talked to, she's pretty clear she thinks the economy will get better next year it if she could just have a few more months on to keep from dipping into her 401(k) and the like. there's just so many different angles. doctors, families in the amt, there's so many different things in the tax code every year we patch that aif congress doesn't fix it, a lot of people, millions and millions of people are going to pay higher tax bills. >> christine, i understand there's one group in particular, and that is families with children, that are really going to hit hard. >> that's right. parents very closely looking at four key tax goodies that they get in the tax code.

one of those could go away. there's a child tax credit. it could be cut in half or zeroed out for married couples making $110,000 more. they can claim a smaller deduction for day care. an earned income tax credit close to $6,000 and there's something called the american opportunity tax credit, suzanne. it's designed to help lower income families pay for college. it was born out of the stimulus in 2009. that would revert it to a small amount. all of these are things parents enjoy right now. it means working families with children would see a higher tax bill as well. >> all right. we are waiting and watching what happens here in washington on congress and on the hill to make sure that people don't go through all of this because it is an extraordinary development and could mean a lot of people very much suffering because of it. thank you, christine. appreciate it. the bottom line, taxes could go up in the next 12 hours.

everybody watching negotiations in washington, they want a deal. people want a deal. we're not talking about just here in the united states. we're actually going to take a look at how this has a global impact as well. later, they are ancient fragments of what could be an original copy of the bible. we're going to take a look at the dead sea scrolls. [ male announcer ] your favorite foods fighting you? fight back fast with tums. calcium-rich tums starts working so fast you'll forget you had heartburn. ♪ tum tum tum tum tums [ male announcer ] as the year counts down, your savings can add up with the adt new year's sale. help protect your family with the advanced technology of adt starting at just $99 -- a savings of $300 plus 15% off accessories. but you must call before midnight january 2nd. more than a security system, adt can help let your family in from the cold even when you're away from home.

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my new year's message to

washington is this entire problem isn't an isolated incident. it's how par zanship and polarization have taken over congress. i'm 18 and go to college in d.c. i used to be excited for the future but i don't want a country that doesn't have a successful working legislature. congress, remember what your purpose is and get back to doing your job. >> amen. if congress can't reach a deal by midnight, higher taxes are not the only concern for americans. there are many families who might not have any money coming in at all. more than 2 million people are at risk of losing their long-term federal unemployment benefits as the new year begins. another 1 million workers will exhaust their 26 weeks of state unemployment benefits in the first quarter, won't be able to file for a federal extension. earlier i talked to the president of optimum capital management, ryan mack, about the potential fallout. we're talking about those who are really at risk, those who might not get their unemployment benefits. what kind of options do they

have? >> i mean, essentially these are a lot of individuals operating out of a lot of fear. we do a lot of work across the country talking to those collecting these checks, and basic questions of, what sort of -- can i eat? can i pay for housing and shelter? these are basic concerns. so what we have to first understand is we have to start understanding -- while we teach financial literacy, they have options and can do things like making investments. liquidity is key, and instead of putting money in the market or trying to make that $10 investment in a stock become the next google, put a budget together. start doing research on improving your credit. making sure that you can start asking certain questions. how can we negotiate our interest rates on credit cards? make job searching your job, which is essentially a key component in understanding every single day, writing down a list of priorities, when will i accomplish this thin. from 9:00 to 5:00 you work and

get a database together of different job connections you may have and how -- and ranking them in terms of are they going to say yes or no and really making sure from 9:00 to 5:00 you're doing an appropriate search. >> ryan, you mentioned something that might seem obvious, but a lot of people don't think about this. you say you should stay healthy and take good care of yourself. explain. >> you might not have any money for a gym membership, but you can go jogging and do a dvd workout in the house. you can try to eat as healthy as possible. i mean, these things and making sure that you can -- i mean, working out takes the stress level down, allows you to have a healthy mindset and healthy body and improves your ability when you go into interviews that you have a more confident mindset and outlook. we need you looking bright to make sure you go on job searches and showing your best you. >> you also say, too, that part of showing your best you is maintaining your faith, a sense of confidence moving forward.

>> yes. again, if i can just talk to the unemployed out there for a second, i understand that this political circus right now is a travesty, but we need to have the appropriate amount of faith. if there's a mathematical equation for faith, it's half belief and half acting on that belief. people act according to what they believe is going to happen in life. we rise and fall together in this country, and we need everybody operating on full cylinders. we need you to believe that tomorrow you can find na job, and then we need you acting on that belief and doing all the things fiscally as well as mentally preparing yourself to move forward so we can move together in the country. i feel for you and pray for you, but we need you in this fight. >> americans aren't the only ones watching closely for signs of a fiscal cliff deal today. the world is watching, too. it's because the big tax hikes and spending cuts here could have a chilling effect on the global economy. we want to bring in richard

quest from london. richard, we know that folks are watching this. perhaps not the minutia how we're following it in washington and the negotiations process from hour to hour and minute to minute it seems. certainly in the final stages of it this whether or not this is actually going to happen. why does it make such a big difference? >> reporter: it makes a huge difference because the rest of the globe, particularly say for example the european union and the euro zone is barely growing. it's stagnant and was in recession in '12. it could be in recession in '13. if you lop off any growth from the u.s. economy, that will have a ripple affect across the althouthe atlantic. you will feel the ripples go across the pacific to asia and japan and china and to all those countries and across the atlantic to europe. i was talking a few moments ago to ali rand. he's the vice president for the urpian commission and he's the economics commissioner for the yourian union. the chief if you like of

economics. he said we're concerned about the u.s. going over the cliff. it's time for a partial deal, and we support the efforts of u.s. policymakers. he said it would have a negative impact, and he said if there's no deal before the year's end. europeans tonight are -- not that it makes much difference. are calling very firmly on all the parties in washington to get a deal done. >> so, richard, i don't know if washington is listening to anybody outside of washington yet, but we'll see how the day goes. there's a lot of blame directed to the united states, but you know, you look at the euro zone, and it had its own issues. it took them quite a bit of time before they could actually get their own deal, their bailout deals done. is there a backlash, do you suppose? is there a bit of blame that is actually not warranted? >> reporter: and you're right. you'll remember the president did actually admonish the

europeans to get a deal done. tim geithner said again and again it was time for the europeans it to stop messing about. the canadian finance minister was furious at the g-8, the way the europeans were may having. geithner even came over to europe to try and sort of chimy them along he was so woerried. i don't think the fiscal cliff is quite as dramatic and dreadful as if there was a greek exit for all of the euro zone collapsed. that would have been far worse, but this drip you're talking about it hour after hour. this drip, drip, drip effect is corrosive to investor confidence and consumer confidence because ultimately it will slow down economics on both sides of the atlantic. that is not an opinion. that is a fact. >> all right. richard quest, thank you. we're going to be watching that drip, drip, drip all day.

hopefully we can turn off the faucet and it won't happen. thanks. it's the oldest bible known to humankind. we're getting an up-close look at the secrets of the dead sea scrolls. th the adt new year's s. help protect your family with the advanced technology of adt starting at just $99 -- a savings of $300 plus 15% off accessories. but you must call before midnight january 2nd. more than a security system, adt can help let your family in from the cold even when you're away from home. adjust your thermostat remotely to help save energy and money. turn on the lights, even see that everyone is safe and secure. and with adt, you can rely on our fast response monitoring for 24/7 protection against burglary, fire, and high levels of carbon monoxide. the adt new year's sale. it could help you save something more important than money. call now to save $300 on adt

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the dead sea scrolls have been discovered decades ago. they've been cleaned up in recent years, and it can be read clearly. sarah reports google has posted them online for the world to see. >> reporter: the pain-staking process to preserve a tiny piece of history, more than 2,000 years old. in these delicate pieces of ancient parchment, you can see

the text of the ten commandme s commandments, genesis, psalms, p ma many of the writings that make up the bible. these are some of the thousand of fragments of the dead sea scrolls found by a shepherd in caves 65 years ago near the dead sea in what is now the west bank. >> these are all manuscripts written 2,000 years ago at the time when therm formal liesing it today. >> there are only five conservators on the planet allow to handle the fragments which when pieced together have the well-known texts of the world. now they're available for anyone to see and study online, a joint project between google and israel's antic wit authority. >> for me, this is a dream come true. i've been working on this or i've come up with this idea five years ago. now not only the scholarly world

will gain but the public as well. >> the five-year process included photographs thousands of fragments 28 times each front and back usual different colors of the spectrum and nasa technology to reveal previously undetectable writings. >> i get all the exposures on the screen and combining them into one image. >> we're going to integrate at this point the infrared image of this part, exactly this part, and now secret writings are going to be vee vealed by the infrared image. >> every itty-bitty fragment has a code, and you can punch that code in by going to explore the archive. then it will give you a lot of the information about that particular fragment. so we were looking at 4q243. we saw that photographed. we punch that in, and up comes some images.

it says that the site it was found in was cave 4. that the language is aramaic. if you click on any of these photos, you can zoom into an incredibly tight picture and see the finest of details. >> google's mission is to organize the world information and make it universally accessible and useful. it's hard to think about more important content than the scrolls that have such significance to so many people worldwide. >> in the 1950s the scrolls were photographed and last year five of the 900 manuscripts were put on the internet. for this project nearly all 900 manuscripts are online, and 1,000 of the fragments have been enhanced by the new technology. controversy has followed these scrolls from the day they were discovered. arguments abound over who actually wrote nthem and who ows them. now that they are available for the entire world for crowd sourcing, who knows what new

controversies or perhaps answers can be uncovered in these ancient writings. cnn, jerusalem. just about 12 hours left before potentially we take the plunge off the fiscal cliff into much smaller paypaychecks. many of you are weighing in. >> my new year's message to washington is to secure the blessings of liberty to ourselves and our posterity and invest in our children, in our schools, and in our communities. raise taxes on the rich, and eliminate corporate loopholes and do not cut social security or medicare. the capital one cash rewards card gives you 1% cash back on all purchases, plus a 50% annual bonus. and everyone likes 50% more... [ midwestern/chicago accent ] cheddar! yeah! 50 percent more [yodeling] yodel-ay-ee-oo.

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in washington right now a

potential agreement to keep us from falling off the fiscal cliff. jessica yellen at the white house with some details. what are you learning? >> reporter: hi, suzanne. first of all, there is an emerging deal here, but it is still not done. it is in progress. there's a sense of sort of optimism that this will come to closu closure. what we know about this deal right now is that it would allow for earners at the very top to let their tax rates go back to clinton levels. so that is what was set to happen in the new year anyway. it only hits the very top earners. then the next level of the deal, households that earn $450,000 are the ones impacted by this. individuals who earn $400,000 a year are the ones who would see it go to clinton levels. the deal -- the emerging deal would also include as i understand an extension of unemployment benefits and a

compromise on the estate tax that would allow a slight increase or something of an increase from where we are now but not an absolute jump to where it would be beginning tomorrow. now, if there were no deal. the big sticking point as dana is reporting is on the sequester, and just to point out, one of the big reasons democrats would not want it to be a three-month extension is because it would mean that spending cuts kick in right as the nation is heading into a fight over the debt ceiling. the debt ceiling is going to hit again in february, suzanne, and there will be another war over that between the democrats and republicans. add these spending cuts to it, and we'll see another massive blowout like we have here. >> jess, it sounds like there's movement and development. i have a couple of questions for you. when you talk about the top earners, who are those people? have they defined what they mean when they say the top earners? >> reporter: yes. let's caveat all of this by saying this is an emerging deal.

nothing is done. it could still change. having said that, within this deal it would be individuals who make $400,000 a year, households, so couples who make 450. if you don't make that, you would be paying under this deal exactly what you're paying right now. most, you know, viewers and most people in america, 98% of americans, would not see their taxes change under this deal for their federal income tax rate. >> okay. then the second question, the extension on the unemployment benefits, is that something that is short-term or long-term? have they figured that out? >> reporter: yeah. that, i don't know. just based on how these deals have worked in the past, suzanne, they've always been short-term. then they fight it out in another year. so they're usually one-year unemployment benefit extensions, and that's all. so i would assume that's the same, but we'll wait and see. >> okay. final question, jess. i think you already covered this

year. you talk about the sequester, the $110 billion in spending cuts. that's the sticking point at this juncture here, whether or not that would be kicked down the road three months or kicked down the road for a year, is that right? >> reporter: that's my understanding. that's the major sticking point in the negotiations right now is my understanding. there are other issues to be worked out, but that's where the major fight is right now. and it's dana bash up on capitol hill that has been reporting that democrats want the year, republicans up want twant the t months. democrats want to put it off to give time to negotiate how to find spending cut agreements. republicans want it as soon as possible so they can start this fight in the new year again and begin this negotiation process to trim entitlements and get some of their principles locked in. >> excellent reporting. of course, we'll get back to you

as soon as there's movement on other details and the sticking point you mentioned. jessica yellen at the white house, thank you very much. many americans are furious about the potential of their taxes going up if there's no deal reached. there are many lawmakers, too, that understand that frustration. we're going to talk to democratic senator mary landrieu joining us from the capitol. thank you for being here with us. first of all, you heard jessica's reporting and dana's reporting as well. does that sound like a reasonable compromise, something you could sign onto? >> suzanne, i haven't heard all of the details but i've been open on the democratic side and some on the republican side open to a compromise that would reach a balanced approach. by balanced, we've got to put both new revenues on the table to close the budget gap and some additional spending cuts. one of the things, suzanne, i wanted to let people know is democrats have already over the last year before this election put $1.5 trillion of spending

cuts in place. what we've been lacking is a partner on the other side that will put revenues on the table. the good news is i'm glad we're here at work. we need to stay at work and get this done. the negotiations seem to be moving in the right direction. >> and are you satisfied with the president's position here? because he won, and he had a mandate. he said $250,000. anybody making more than that, they would not have their tax cuts extended. now that has been raised by about $200,000 or so in that income threshold. do you think the white house has folded? >> i think what the president has done is done his very best, and he's been very successful to date in protecting middle class families. the other side wanted to put all of the burden on the middle class through, you know, terrible cuts to programs that support middle class families, whether it's deductions for

homeownership or deductions for putting your children through college. that was unfortunate. so the president's done a good job. everyone's going to have to compromise, including the president. i think he would say he'd prefer 250, but if we have to go to 350 or 400, he wants to solve this. you know, he wants to compromise. again, we've got to close this deficit, and it's done not just by cutting but by putting revenues on the table and asking the wealthiest, which the president is good at saying ask the wealthiest to pay more than their fair share. >> i know there's another issue dear to your heart we want to discuss as well. last week the russian president putin banned all u.s. aadoptions, very much a vindictive measure for something the u.s. had done as well looking to punish those human rights violators from russia. you have been very vocal about this. you have two adopted children yourself.

i understand that you've written a letter to president putin to try to get him to change his mind. is there anything that can be done to the nearly 50 pending adoption cases now where american parents have already met what they believe were their russian children? >> i hope so, suzanne. as ayou know, frank and i have two beautiful children aadopted domestically, but there are over 100,000 adoptions in america every year mostly by americans for american children. we have adopted anywhere from 10,000 to 20,000 children overseas because americans believe and i think most people in the world believe that children should be raised in families by parents or at least one responsible adult in a family-like setting. it is grossly unfair not just to america but to the children of russia for what they did and the president signing a bill that does nothing but harm russian children who are desperately in

need of a family. domestic adoption is growing in russia, but not sufficiently to take care of it. so, you know, i've never heard of a country that would use children as a political pawn. i mean, even in the united states' worst days, we don't do that. it really is very unfortunate. >> all right. senator, we appreciate your time and your perspective on both issues. next hour we're going to talk to republican senator john barossa of wyoming to get a sense of what he believes is a fair deal. the negotiations that are taking place to avoid going over the fiscal cliff. that is going to happen at 1:10 eastern. we'll have more after the break.

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all the back and forth may force the internal revenue service it to change the start of the filing season. there are people out there that file on time, and now it looks like there might be a delay. tell us why. >> this is because of the alternative minimum tax and also known the amt. it doesn't make the headlines and we don't report on it every year. this happens for years. congress passes fixes to the amt, and the latest one is now

being held hostage by all of these negotiations going on with the fiscal cliff. it's sometimes called the wealth tax. it was created back in the 1960s and what it was meant to do was stop rich people from dodging taxes. here the problem. it was never adjusted for inflation, so congress has to go in every year and temporarily raise the income exemption levels. the thing is, it's one of many tax provisions that need to be addressed in these cliff talks. until it is, it means up to 100 million people may not be able it to file their tax returns until late march. there are lots of americans who need to file much sooner than that, and they're the ones that need the money most. low income families with pretty simple returns who rely on refunds to cover, you know, holiday bills or something like security deposits on an apartment. this could really sting them the most. suzanne. >> and alison, this actually happened two years ago when there was a delay for the filing. how did that impact folks there?

you say it is a very difficult situation for a lot of people. >> yes. what you're talking about is what happened in 2010 when it took, you know, president obama and lawmakers until mid-december that year to reach an agreement on many of the same issues. that delayed the opening the tax season until mid-february, which hit about 9 million taxpayers. here's the difference with this now, with the oberto negotiatfi negotiations. we're later in the game, and the impact could be much bigger. the reason it's so frustrating is because congress has been passing these fixes for ages, and both parties will agree to a fix. they will agree to a pact, but until the the broader cliff deal is reached, those tax paris wants to file early to get refunds are out of luck because lawmakers don't want to touch the amt until they fix the fiscal cliff issue. it's actually crazy if you ask me. >> alison, thank you very much. this just in to cnn here. we have breaking news. we understand president obama is going to be addressing the

nation from the white house just one hour from now on the fiscal cliff crisis. we're going to bring that to you live as soon as it happens, but we're looking at our watches here, our clocks. about 1:30 p.m. eastern the president will come out and address the nation regarding whether or not we're going over this fiscal cliff, the talks and negotiations taking place, the back and forth. we know the vice president as well as top republicans in the senate have been involved in talks throughout the evening and early into the morning. there's some sort of rough framework they're working with here, and we will hear from the president himself on the status of those talks. that is in about 45 minutes from you now. secretary of state hillary clinton is in the hospital for a blood clot. dr. sanjay gupta says the drugs that doctors are using are offering clues to where that clot is. [ lisa ] my name's lisa, and chantix helped me quit.

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2013 less than 12 hours away in "new york times" square folks are getting ready for the big party. take a look. >> two, one. happy new year! >> that's a test run yesterday. the famous crystal-covered ball went up 130 feet like it's

supposed to. alina cho is in times square. >> for all the talk about the crystal ball, the confetti, and new year's resolutions, here's what you need to know if you come to times square tonight. dress warmly. it is frigidly cold, and it will feel like it is blow freezing tonight. let's talk about security. it's something we talk about every year, but it is mind-boggling the amount of security that will be in place tonight. thousands of police officers, sharp-shooters on rooftops, radiological scanners, explosive he teams, tactics teams, firearms teams. unless you think it won't be safe here in times square, there will be surveillance cameras throughout. also, something you should know if you plan to come to times square, do not bring a large bag or a backpack, do not bring alcohol. you will not be allowed inside the perimeter. some of these people who are here early already, they're very smart. get here early. the streets around times square start to close at about 1:00

p.m. eastern time, so get here early. 1 million people expected to jam times square tonight. it will be packed. it will be freezing cold. hopefully with all this security it will be safe. >> all right. thanks, alina. it's a fun night. you can see it here on cnn's new year's eve live with anderson cooper and kathy griffin and starts at 10:00 eastern in "new york times" square. tyeah, its the galaxy note ii.re great. you can do two things at the same time. you can watch videos and text. or you could watch the earnings report and take notes, like we're supposed to. so... can i get it? yeah. okay either of you put together the earnings report yet? yes, me totally. what? why don't you tackle the next quarter. you eat yet? polynesian? pu pu platter? yup! keep up the good work. i will keep up the good work. do more with the new samsung galaxy note ii.

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implts george h.w. bush's

condition is moving. he was moved out of the intensive care unit in a houston hospital where he's been for more than a month. a family spokesman says he's fighting a stubborn fever after being hospitalized with bronchitis. on friday the former president got a calm from one of his favorite singing groups, the oak rid ridge boys. ♪ aamamazing grace how sweet th sound ♪ >> a family spokesman said it really cheered him up. 88 years old, bush is the oldest living former president, four months older than jimmy carter. secretary of state hillary clinton is in the hospital after doctors discovered a blood clot related to a condition that she suffered earlier this month. she's expected it to remain at the new york presbyterian hospital for another day or so while doctors monitor her condition. dr. sanjay gupta looks at how serious this could be. >> suzanne, i looked at the

statement very carefully from the state department about the secretary of state. they talk about the fact that she has a blood clot. they did not specify where it is. they say it's related to the concussion, although we're not exactly sure how. the only thing we know for sure is she's treated with anticoagulants or blood thinning medications. what likely has happened here is when you talk about a blood clot, if it's treated with blood thinners, it's unlikely to be something on top of the brain or around the brain, because that's the last thing you want to do. blood-thinning medications at that point can worsen the bleeding or prohibit an operation from occurring, should that be necessary. again, we simply don't know. what i can tell you is that blood clots typically treated with blood thinners are located in blood vessels such as veins. you may have heard of dvt, for example, suzanne. deep venous thrombosis. if they're treated, the concern

is they can break off and travel through the body and go to the lung. that's called a pulmonary emp lichl, and that could be a significant concern. there could be veins around the head that could have been affected by the concussion, by the brain injury a few weeks ago. details are a little sketchy out of the state department on this. i worked for the secretary of state back when she was first lady in 1998. she had one of these episodes a dean venous thrombosis at that time and said it was frightening. she has experienced it before, and as a result more likely to experience it again. also, we know she's a very well-traveled secretary of state, theost traveled, in fact. lots of air travel can put you at risk as well. finally, because of the concussion she may have been asked to lie around, not do much, a very hard thing for her i will tell you. that can put you at risk. as we get more details, suzanne, we'll bring them to you. >> thank you, sanjay.

you make a resolution on new year's day and on january 2nd you broke it already. now there's an app to help you out. we'll show you the best one to help you stick to those resolutions up next.

new year's resolutions, we all make them, right? how many keep them? laurie siegel found some smartphone apps that could actually help you stick to your goals in 2013.

>> it's time to make those new year's resolutions. >> top happier, healthy. >> lose my temper less often. >> i'm going to try again this year to get into better physical shape. >> you know, the resolutions you sometimes keep. >> that's my new year's resolution year after year. >> is there an app for na? >> i think i'm concerned with the appetizer sxnt the phone app, you know? >> that's where health tap comes in. >> people ask about healthy living, how can they be pro active about their healthying about things like nutrition, better eating, reducing some stress especially around the holidays and sleeping better. >> the service connects users online with local doctors to answer questions. they can use the app to choose a specific resolution and work with a doctor to achieve it.

>> if you have questions how to sustain it, you can ask these doctors and get an answer for free and continue engaging in it throughout the year. >> for those looking to get a bit more organized in the new year, an app called brewster consolidates your contents into a high tech address book. >> if you're thinking about networking for the new year and thinking about who you should reach out and say hello to, all of these people in brewster are a search away. >> it combines your contacts from facebook and twitter creating a digital view of your personal relationships. >> it has all the nuts and bolts like e-mails and phone numbers, the facebook user name. it shows you their interests and hobbies et cetera. >> if you find a group of friends who want to work on the same resolution, you can build your own app to work on goals together. >> anyone can create an app. >> to create an app users head to yapp's website, pick a theme and choose a content and the app is ready on your iphone.

>> you create a buff in 2013 app? this is your goal, right? >> yeah. we created this app with some friends with a similar goal. as time goes on and as we work towards these goals, we can encourage each other. >> it could be someone's new year's resolution to build their own app. >> nafs your new year's resolution, you can accomplish it on day one. >> laurie siegel, cnn money, new york. i'm suzanne malveaux. here's what's going on right now. we're actually going to hear from president obama on the fiscal cliff negotiations. that is at the white house, and that's going to happen in about a half hour on so. we expect there will be some news. they're clearly trying to hash out some sort of deal on both sides, that both sides feel is acceptable it to avoid the massive tax hikes and spending

cuts that nearly all americans would experience starting tomorrow in the new year if these two sides do not get together. so we are expecting the president there at the white house to make a major statement to the american people regardleregarding where we are on nxs. pope benedict is holing a new year's eve mass. italy will celebrate the new year in five hours. we'll show you other great celebrations we've been watching from around the world. this is victoria harbor. this is in hong kong. beautiful fireworks show. organizers say it was the biggest one ever. watch this. pretty spectacular. another big party. this one is over sydney harbor bridge in australia. the show was huge. we're talking about seven tons of fireworks. check out this.

nice. celebration in new zealand. that is auckland sky tower. organizers were worried back weather was a problem but everything turned out just fine. we are watching throughout the world. seoul, south korea, the mayor and others gathering to hit the traditional bell and welcome in the new year. happy new year to many of those around the world. here in the united states new year could usher in a sobering reali reality. we're talking about the major tax hikes for almost every one of us if congress does not reach an agreement on the fiscal cliff. president obama is now scheduled to make a statement about the negotiations. that's going to take place about 1:30 or so, in less than 30 minutes. we'll bring it to you live at the white house as soon as it happens. we want to talk about what is going on behind the scenes. you have negotiations led by the

vice president and senate minority leader mitch mcconnell. sources are telling us they are making some progress, but here's the catch. if a deal is reached, there is no guarantee it's going to pass. here's what democratic senator tom harkin said on the senate floor earlier this morning. >> if we're going to have some kind of a deal, the deal must be one that really does favor the middle class. the real middle class. those that are making 30,000, 50,000, 60,000, 70,000 a year. that's the real middle class in america. and as i see this thing developing, quite frankly, as i've said before, no deal is better than a bad deal, and this looks like a very bad deal the way it's he shaping up. >> we cover it from all angles. we have dana bash on capitol hill and jessica yellen at the white house. what do we expect the president to say? is he going to essentially lay out a deal here, something that they are working on, or do you think this is meant to push the

negotiations, push the republicans a little bit harder? >> reporter: well, i'm advised that there is no deal yet. they're still in talks. it's still being worked out, so i would expect he's not going to announce it, unless something dramatic happens between now and half an hour from now, i don't think he'll announce a deal. i think it's what you suggested. it will be to prod republicans to agree to it, use the bully pulpit, and to speak more broadly to americans and use this opportunity to encourage congress as he has done before to, you know, suzanne, get their business down before new year's eve. so we've laid out essentially what the details so far would be, and it does seem it's continuing to move in that direction. no major changes that we've heard of so far. i think this is a bully pulpit opportunity for the president, suzanne. >> all right. thank you, jess. we'll bring in dana here. we know there's progress made, but there's a sticking point that you had mentioned as well. that is about the automatic

spending cuts that are scheduled to kick in, and na democrats and republicans have a different sense of when they should deal with that. explain what that's about. >> i will, suzanne. if i may before i get to that, i just want to tell our viewers that i now have confirmation from a republican aide here in the senate of what jessica first reported earlier today. it's that they seem to have agreement on a major issue, which are those tax rates, where they should go. as jessica reported, the tax rates are at $450,000 for households, $400,000 for individuals. what i mean by that, of course, tax cuts that are currently in place right now, they'll stay in place up until those thresholds. above that they go away. there will be tax increases, at least that's how many see them. that, again, has been agreed to by republicans according to a senior republican aide as well as the democrats. it was the democrats' proposal a couple of days ago in the first place, so that seems to be

pretty significant movement. there are other things that are still question marks, but the deal does seem to move in the right direction. one of the question marks is what to do about the sequester and differences. perhaps at this point, suzanne, not about -- it's about the length of how long you delay this sequester or those spending cuts that are mandatory. but also what you replace it with. democrats still want to replace it with some of the revenues they get from the tax increases and republicans don't want to do that. that is something that is still being worked out i'm told. >> dana, if you can help us understand this, because let's say that the president does come forward and says these are the par meters and this is what we are talking about and hoping the republicans will move a little bit. is it likely it would pass? how would that work? >> you know, it's a big, open question. you just played a sound bite from tom harkin. he's one of the leading liberal voices here. he made clear to me personally just in a conversation that we

had before he went to the senate floor that he -- one of the big issues for him is this $450,000 income threshold that he thinks is terrible from his perspective. having said that, the sort of hope among the democrats and republicans who are running these talks is that enough people want to come together that they'll get enough votes in the senate. one interesting tidbit about the house, suzanne. we have been talking to house republican sources that say because at this point because we're at 10 after 1:00 eastern time on december 31st, at this point even if the senate passes something today, they think it is much more likely that the house won't take up something until tomorrow. it's just because of the process. it would take too long, but politically what does that mean? it also means that technically what everybody in the house will be voting for is a tax cut, because everybody's taxes will have gone up and they can argue that to their constituents and

maybe more importantly against their political opponents. i talked to one republican source who said that could help get a handful of votes from the republican side in the house. a source said the handful of votes may be all they need and might matter in the end. >> we'll follow you and jessica yellen. obviously, the president is coming out in 20 minutes or so and we'll see what he has to say. if there's more details or pushing the republicans a little further in the negotiating process. it's 11 hours before we hit that deadline, the fiscal cliff deadline. if there's no deal reached, the big question is, how is it going to affect all of us? if you're sing with no kids and make $50,000 a year your taxes go up by $1500. well, if you take a married couple with two kids making $100,000, they see their taxes go up $5300 a year.

christine, what dana was talking about, let's say the senate takes it up, but the house delays, right? they don't decide whether or not they approve of this, and there is that delay. would that delay going over the fiscal cliff, are there some things that are going to automatically happen whether or not they do anything at all? >> well, there's something that has already happened. december 29th was the last day of unemployment benefits, the last day of the unemployment benefits for people on extended federal unemployment benefits. that is already over. if we go over the cliff for a day or two or takes the house a minute to catch up, you have to ret retroactively go back and fix the unemployment situation. 2 million people had their last check on friday. the cliff is already there for these folks. incredibly critical for them. you have another million or so by the end of the quarter who see that benefits, they weren't be eligible for them.

the payroll tax, that holiday is over. payroll taxes and withholding rises to 6.2%. from what i can tell from the negotiations, you can see a little bit lower paycheck anyway. that payroll tax holiday is not part of the deal. early tax refunds could be delayed. there's a whole host of things right here on the tipping point right now. that payroll tax holiday and the unemployment benefits is what you feel most and first. >> christine, i want to talk about the one thing they seem to be caught up on here is what they're calling the sequester or in layman's terms, it's the $110 billion in spending cuts. whether or not that would be delayed for three months or whether or not that would be delayed for a year. can you explain how that's tied into the debt ceiling debate and what that means. >> here's the thing p about the sequester. it's a budget wonk word. it's an ugly word for an ugly

thing. if you push it off, you haven't solved a big part of this budget deficit and debt problem. so you're kind of creating a mini-cliff down the road. you're going to fight about this again. the debt ceiling coming at $16.4 trillion. we will hit it probably right now, the treasury secretary says. they have wiggle room, about $200 billion worth of breathing space as they call it. they can move some things around in the checkbook, i guess, and they can wait to hit that maybe in february or march. but you're looking at -- if you push the sequester down the road and don't handle the debt ceiling, then you're talking about setting yourself up for another painful political crisis ahead. that could be trouble, i think, for stock markets and for businesses who still need some sort of certainty overall. >> and finally, christine, there was one thank we've been talking about. that is the extension of unemployment benefits. how would that impact a number

of people who really need, really need that kind of support? >> you know, it's interesting. unemployment benefits, mark zandy has said all along the unemployment benefits are stimulative to the economy. they cost money to the federal budget, but they put money right back into the economy. if you don't have unemployment benefits moving in the economy and you have all these people who don't have this lifeline, 2 million of them as of friday, that could hurt the economy. that's what this whole fiscal cliff debate is all about, right? it's about taking money out of the economy. it's about slowing job growth. it's about the potential for a recession in the beginning part of this year, and 9.1% unemployment by the end of the year because of all the money taken out. so what they're doing here is critical stuff. you heard about how this whole process taking a hatchet in the efforts of budget control, when you should use a scalp peel but congress has shown any

willingness. >> christine, thank you very much. we'll get your perspective on the other side of the president's address. it's about 15 minutes away or so. he will speak at the white house addressing the american people essentially about the updates on the talks with republicans. it has been the vice president, vice president biden, and the republican senate minority leader mitch mcconnell who have been in negotiations and discussions. we'll see just how far they have gotten and whether or not there is something real that has been put on the table. we're going to have that as soon as it starts. it was just the last hour we heard from democratic senator mary landrieu. she wanted to weigh in as well about the gridlock in washington. here's what she said. >> the good news is i'm glad we're here the at work. we need to stay at work and get this done, and the negotiations seem to be moving in the right direction. >> coming up, we hear from the other side of the aisle, republican senator john barosso. he's going to be joining us

live. tyeah, its the galaxy note ii.re great. you can do two things at the same time. you can watch videos and text. or you could watch the earnings report and take notes, like we're supposed to. so... can i get it? yeah. okay either of you put together the earnings report yet? yes, me totally. what? why don't you tackle the next quarter. you eat yet? polynesian? pu pu platter? yup! keep up the good work. i will keep up the good work. do more with the new samsung galaxy note ii.

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second hour. we've been talking about the fiscal cliff if there's no deal to stop it. there has been symptom progress reporting this morning in the last couple of hours. we hear that democrats and republicans have a lot of work to do on key issues. there are sticking points here. we are expecting to hear from the president in about 15 minutes or so. 1:30 eastern. he's going to make a statement

updating us on the state of negotiations. we'll bring in republican senator john ba wrassr barasso. we have heard an outline of kwhaets on the table. we heard the new threshold is $450,000 for a household. anybody above that, the tax cuts would expire. that is considerably high her than what the president offered initially, which was $250,000. does that sound like that's something acceptable to you? >> i think that there is some good news coming out today. things are moving in a positive direction. i do want the american people to have certainty. i he mean, they need to know what's going to happen come midnight tonight in terms of what they're paying in taxes. i'd like to see taxes go up on no americans. i don't want to raise taxes on anyone. i think that we're heading in the right direction, and people ought to be expecting some certainty coming out of washington on a better functioning congress than what they're seeing.

>> is this something you would sign and support? >> i've talked with people in the cloakroom and on the senate floor, reapublicans and democras alike. we want a solution. we should have done this six weeks ago the president put off because of the election dealing with these things. if they raise taxes on anyone, the president campaigned on raising taxes for people making over $250,000 a year. the question is, what are they going to do with that money? i want to see, as the president promised, it would be used to pay down the debt. that's a sticking point. the president wants to spend the additional money, and the spending is our problem and why we have a $16 trillion debt. >> all right. so senator, just to be clear here, in the talks and colleagues you reached out to this morning, do you think what we're working with now is an acceptable deal and something republicans would sign on at least on the senate side? >> they'll get an aagreement that it's something to pass the

senate, and i would hope it would be in a bipartisan way. no senator will say yes right now until they see what's in the agreement, which is from the beginning. senator reid shut put a bill the on the senate floor and let the american people see the process. not another deal cut behind closed doors. why aren't we on the senate floor debating the issues and bringing forth amendments and having them voted up or down? that's the way democracy is supposed to work, and that's what i would like to see happen today in the united states senate. >> senator tom harkin of the other aisle had this to say earlier this morning. i want to get your take on this. >> if we're going to have some kind of a deal, the deal must be one that really does favor the middle class, the real middle class, those that are making 30,000, 50,000, 60,000, 70,000 a year. that's the real middle class in america. as i see this thing developing, quite frankly, as i've said

before, no deal is better than a bad deal. this looks like a very bad deal the way it's shaping up. >> would you be willing? do you agree with him, that no deal is better than a bad deal if this is not the kind of deal you would sign onto? >> i think that senator harkin's speech really points out how divided the democrat party is on these things, about what level of taxation, taxes on small businesses all around the country, and the death tax. the democrats are terribly divided on these issues. when most americans say, hey, we ought to prevent these death taxes from making people sell their farms or their ranches and their small businesses. we need to protect small businesses. they're the job creators in this country. so there is a fundamental difference. >> senator, with all due respect, clearly the republicans are divided as well. i mean, speaker boehner had a hard time even getting his own party to sign onto a plan b, which was more modest. how at this point moving forward do you get the republican party

united and in lock step with something that's going to help the american people? >> well, the discussions are continuing. they're heading in, incompetent, a positive direction. people want to look at it and make the vote. republicans, i will tell you, are going to wait and make sure we focus on the spending. wherever you draw these lines and what the tax rates are going to be on, it will pay for at the most a week of what the government spends. you still have to deal with the other 358 days of the year. that's why wref to focus on how we spend the taxpayers' dollars, and most taxpayers think the money is being wasted. >> senator, thank you so much. we appreciate your time. of course, we are waiting for the president. he's expected to speak at the south court auditorium at the white house. this is happening at 1:30, about ten minutes or so away. we're very interested in whether

or not the are meaty details, significant progress made from both sides. we have an outline and framework and based on the talks and negotiations taking place between the vice president and the head of the senate on the republican side. we will see if, in fact, they are making any real, real progress or if this is just a push from the president, a tactic to push the republicans and to get public support by using the bully pulpit there at the white house. we'll bring that for you just moments away. orrexion® deep wrinkle night cream. it's clinically proven to give 10 years back to the look of skin. now for maximum results... the power of roc® retinol is intensified with a serum to create retinol correxion® max. it's proven to be 4x better at smoothing lines and deep wrinkles than professional treatments. new roc® retinol correxion® max. nothing's better than gold.

wall street investors are waiting to see if there's any break through in the fiscal cliff talks today.

allisison kosik is at the new y stock exchange today. how are investors responding and reacting to this behind the scenes talks and the uncertainty of what's happening. >> what's interesting is you look at the market movement, suzanne, over the past week or so and you can investors are more pessimistic. what's interesting is as soon as the news came out that president obama is having this statement from the white house stocks, went back up. they've since fallen a little bit more, but they're holding steady. the dow around 65 points. you see this market react to every headline out of washington, d.c. it begs the question, where do stocks go from here? if we do get a partial deal on the fiscal cliff, what analysts say would happen is we'd probably see a modest sell-off with the tone more negative as time goes on. with a partial deal, there's less certainty for the marketplace. without a deal at all, there could be a rude awakening for investors when everybody wakes up up and goes back to work on

wednesday and when the market re-opens. it's not a given that congress will do something. some experts are actually hoping to see a big sell-off in the market and could inspire policy-making. one points out although the market is a disciplinarian, it's not a sure thing that we get a clean and lasting solution. something the market is looking for. suzanne. >> thank you. president obama expected to speak at the white house. we're looking at about five minutes away or so. we'll bring it to you live as soon as he begins. we'll have, of course, our team of reporters to do some analysis. we'll take a quick break and be right back.

welcome to viewers across the country and around the world. the fiscal cliff talks now intensifying. any minute now we'll see president obama. he's delivering a statement from the white house on the ongoing fiscal cliff negotiations. of course, we're watching and waiting. we'll bring that to you live as soon as it starts. you see the podium there. already been set up awaiting his remarks. negotiations have been led by the vice president as well as mish mcconnell. we understand they have made some progress, but there are some unresolved matters as well. we'll bring in our correspondents and anchors covering this from all aangles here, this breaking news, of course. wolf blitzer here in washington along with dana bash, chief white house correspondent jessica yellen and cnn business correspondent christine romans in new york. wolf, i'd like to start off with you. one of the things we've learned is initially the president said those making more than $250,000 would face the tax cuts, bush tax cuts expiring. now we understand that the new

deal raises that to 450,000 for a household. how big of a concession is that from the white house's position in light of the fact he ran on that mandate of 250,000 during the election? >> it's a major concession. it's a significant concession for the president of the united states. for months and months during the campaign he threw out the $200,000 number for individuals and 250,000 for families and now it's up to 400,000 for individuals and 450,000 for a family. that represents a major concession on the part the of the president. it will bring in a lot less tax revenue into the irs and u.s. government because fewer people are involved in seeing taxes go up from the 35% rate right now to the 39.6% rate, which existed before the bush tax cuts were implemented in 2001 and 2003 during the clinton administrati

administration. so it will be less revenue. they have to find more revenue elsewhere, but it's something the president felt he needed to do to get a deal to show he's ready to negotiate. so he moved from that 250 to 450, so that's a significant concession from the democrats' perspective. >> jessica, what do we expect to hear from the president in the statement he's going to make momentarily? >> reporter: i believe, he's going to urge action, suzanne, and call on both parties to pass this. as you know and as dana bash reported from capitol hill, there are democrats who have expressed concern about the agreement or the emerging deal. it's not done yet. and there is obviously going to be republican resistance, but you know, he will call on both sides to do something. i point out that while 450,000 for a household is a concession by democrats, the democrats are getting something a lot in this deal as well. it's a return to the clinton rates for the highest income earners. it's an extension of

unemployment benefits. there is an increase in the estate it tax, even though there's a compromise in it that will include the increase in the estate tax. if the deal goes through, it keeps middle class tax rates for 98% of the americans exactly where they are. we would avoid the largest part of going over the fiscal cliff that hits regular americans every day not to mention the fact it would signal to the nation that washington can get something done as we count down to new year's eve. so there would be some accomplishment, and i think that's the message he'll deliver here shortly, suzanne. >> thank you very much. we want to welcome international viewers around the world watching the negotiations, the back and forth to see what happens here, whether or not the united states, in fact, will go over the fiscal cliff. i want to bring in dana bash, and dana, if you would, talk about the other stide to this. that is something wolf mentioned, the need to generate revenue and also make serious cuts here. there's a sticking point when it

comes to $110 billion in cuts and how the democrats and republicans see that playing out in the new year. >> reporter: that appears to be the sticking point. i was just talking to a republican source here familiar with these talks, and i said can we call it a tentative deal? how far should we go? the source said we're very, very close, but according to republicans i should point out the big sticking point, the only sticking point at this point is delaying the sequester and replacing it for two months. so that appears to be what's on the table. delaying the sequester and replacing it for two months with spending cuts. according to the source it adds up to $24 billion in spending cuts. this republican source says that that's something you can find around here under the cushions of the couch. he said if we can't find that, we should pack it up and go home, because $24 billion when you're talking about trillions here isn't that much. from the democrats' point of view, it's more of a philosophical question.

it is a question of whether or not they're willing to when they want to find other areas of the government to cut spending. so that seems to be what's going on right now. republicans say that they have made some suggestions, maybe $100 billion worth of suggestions to democrats. we're waiting to hear from the democratic side on this. when you talk about the big picture, all of the things that they have been divided over from tax rates, which they now agree on, as we've reported, to many other issues, the fact they talk about finding $20 billion in spending cuts to go over two months of the sequester means they are really, really close. >> we've seen it blow up on terms before, but it's very close. >> i'll bring in christine romans, but obviously people around the world are watching what happens here and what happens in washington. they're waiting for what the president is going to say, and one of the things that dana talks about so important is this notion of the debt ceiling and

whether or not the united states can pay it's own bills. explain to us why that is so important and how that ties into the negotiations that we've been hearing back and forth this morning. >> suzanne, it's so interesting because it was a fight over the debt ceiling that sparked all of this in the first place. it caused congress to write this budget control act saying if we don't get a budget deal to get our debt and deficits under control and agree on a budget for this country, then we're going to have this sequester with all of these automatic spending cuts and tax hikes. so the debt ceiling is $16.4 trillion. this is how much the american government can legally borrow and add to a national debt without any more congressional aproouc approv approval. congress has to approve if we keep racking up the debt. we're going to hit that as soon as today according to the treasury secretary. congress will have to come back

to the drawing table again and say, we will raise the debt ceiling if we show how we're going to get our spending under control, and you have another fight ala the sequester and all this again. the debt ceiling and the fiscal cliff are two things wrapped into one, which is so important. if you don't deal with the debt ceiling and push the sequester off again and again, you'll keep having these sort of fiscal cliffesque fights over and over again. it shows how complicated the american budget process is. some would say broken. >> it's a good point, chris tin. i want to bring back wolf. senator tom harkin earlier today said that no deal is better than a bad deal. how likely is it that congress, the senate and house side will pass this? >> i think that there will be liberals who will reject this deal, whenever the deal finally emerges. some liberal democrats in the senate, maybe senator tom harkin, for example. some conservatives will reject

it because the top 2% see those earning more than $450,000 see their taxes go up. they might reject it. i think there will be a significant bipartisan majority in the senate that will pass it. if the president comes out and says he can live with this, and this is a compromise but he's not getting 100% of what he wants, the president says if the republican and the democratic leaders in the senate, harry reid and mitch mcconnell, if they say that, there will be a significant bipartisan majority in the senate. the house speaker john boehner suggested at the white house meeting the other day that whatever passes the senate he would allow to come up for an up or down vote in the house of representatives. if he allows that to happen and the democrats are on board, there will be a need for some republicans to join those democrats in the house and pass it, and then the president would sign it into law. my expectation is that that would probably happen and there would be enough republicans to join democrats. yes, there would be some

liberals on the democratic side and a lot of conservative it is on the republican side would vote nay, but there would be 218 votes in the house of representatives to pass it. then the president would sign it into law. it might not happen today. it could happen tomorrow. let's see what happens. i think there will be the votes, assuming the leadership's on board. >> all right. could you a lot of fast-moving parts that happen. wolf, thank you very much. we'll take a quick break. we're waiting for the president to speak there about the fiscal cliff negotiations. certainly looking like there's an outline that perhaps both sides can live with, but that might be premature. we'll have the details right after the break.

the fkiscal cliff talks are intensifying. the president is delivering a statement from the white house about the ongoing negotiations that are taking place. it's a very high stakes, so we look for a deadline looming hours away to massive tax increases as well as very dramatic spending cuts. negotiations have been happening behind the scenes between the vice president and the senate minority leader, mitch mcconnell. of course, many other people weighing in as well. we understand there's been some progress, even a framework, if you will, of this agreement. certainly not everyone has signed on and there are serious

sticking points. we want to bring in our correspondents and anchors following this. the breaking news from all angles. wolf blitzer in washington and dana bash and jessica yellen and our cnn business correspondent chris he teen romans in new york. we spoke with you, wolf. we want to bring jessica back into the conversation here. jessica, do we think that by making this kind of public appearance, and we've seen more of the president than we have in quite a while in terms of the briefing room to make his case. is this what it's about? is pushing the republicans forward to accept this deal, or do we think we've got something real here? >> reporter: i'm sorry. that just startled me. that announcement. i think that the president is close to a deal, and this is a way to urge it just a step closer to the finish line as we're running out of time. we're doing this in the south court auditorium. he's about two minutes away.

he will not be appearing before reporters but skaulz as they call it around the white house campus, regular people. i think you're seeing them file onto the stage. i don't know who in the audience is, but usually what they do in this auditorium is bring on people who he can say are regular taxpayers who would see their taxes go up, for example, if a deal is not done. i would not be surprised if that's exactly what he will tell us when he comes out. i don't know that for a fact. he can also say if he's not appearing before an audience that's reporters, he can walk out without taking questions and not get criticized. i'd be interested to hear what he outlined as in the deal but what's the next steps. we are running out of hours to get this done, and it's interesting to hear how he thinks it can get done before the clock strikes midnight, suzanne. >> i want to bring in wolf here. wolf, talk about the political capital that the president has. how important and significant is this that we have the fiscal cliff and the president now

looking at a second term? >> it's very significant, suzanne. this would have been a disaster if not only the tax rates for everybody who pays federal nx tax goes up and all the other taxes go up, but also if that forced sequestration. you see the president. i guess that's the president walking over from the west wing of the white house over to what we called the old executive office building, now the eisenhower executive office building right next door to the white house. the president goes in there up to the auditorium and makes his statement. doesn't look like this is going to be a statement that's going to be followed by q & a from reporters. we saw the president walking in. momentarily he'll walk over to the podium there and make the statement, deal or no deal. doesn't look like there's a agreement with the republican leadership in the senate that will allow a vote in the next hour or two or three or whatever. then you see that legislation assuming it passes the senate

and there's no filibuster, no stalling techniques, if you will, see that legislation move to house of representatives. will jo john boehner then allow that same piece of legislation to come up up ffor a vote in the h of representatives or not? will there be any changes required by the house of representatives? then there's a conference committee and it has to go back to the senate. there could be a delay. if they want to do this quickly, though, and there's some assumption that they want to do it quickly, it looks like they will be able to do it. here comes the president right now. >> thank you. please, everybody have a seat.

well, good afternoon, everybody. welcome to the white house. >> nau fthank you for having us. >> now, i realize that the last thing you want to hear on new year's eve is another speech from me, but i do need to talk about the progress that's being made in congress today. for the last few days, leaders in both parties have been working toward an agreement that will prevent a middle class tax hike from hitting 98% of all americans starting tomorrow. preventing that tax hike has been my top priority, because the last thing folks like the folks up here on this stage can aafford right now is it to pay an extra $2,000 in taxes next year. middle class families karntcan' aafford it. businesses can't afford it.

our economy can't afford it. today it appears that an agreement to prevent this new year's tax hike is within sight. it's not done. there are still issues left to resolve, but we're hopeful that congress can get it done. it's not done. so part of the reason that i wanted to speak to all of you here today is to make sure it that we emphasize to congress and that members of both parties understand that all across america this is a pressing concern on people's minds. now, the potential agreement that's being talked about would not only make sure the taxes don't go up on middle class families, it also would extend tax credits for families with children. it would extend our tuition tax credit that's helped millions of

families pay for college. it would extend tax credits for clean energy companies that are creating jobs and reducing our dependence on foreign oil. it will extend unemployment insurance to 2 million americans who are out there still actively looking for a job. i have to say that ever since i took office, throughout the campaign, and through the last couple of months, my preference would have been to solve all these problems in the context of a larger agreement, a bigger deal, a grand bargain, whatever you want to call it, that solves our deficit problems in a balanced and responsible way that doesn't just deal with the taxes but dealing with the spending in a balanced way so that we can put all this behind us and just focus on growing our economy. but with this congress that was obviously a little too much to hope for at this time. it may be we can do it in

stages. we're going to solve this problem instead in several steps. last year in 2011 we started reducing the deficit through $1 trillion in spending cuts. those have already taken place. the agreement being worked on right now would further redu the deficit he by asking the wealthiest 2% of americans to pay higher taxes for the first time in two decades. so that would add additional hundreds of billions of dollars to deficit rukdz. reduction. so that's progress, but we're going to need to do more. keep in mind that just last month republicans in congress said they would never agree to raise tax rates on the wealthiest americans. obviously, the agreement currently discussed would raise those rates and raise them permanently. but keep in mind we're going to still have more work to do. we still have deficits that have to be dealt with. we still have to think about how

we put our economy on a long-term trajectory of growth. how we continue to make investments in things like education, things like infrastructure that help our economy grow. keep in mind that the threat of tax hikes going up is only one part of this so-called fiscal cliff that everybody is talking about. what we also have facing us starting tomorrow are automatic spending cuts that are scheduled to go into effect. and keep in mind that some of these spending cuts that congress has said will automatically go into effect have an impact on our defense department, but they also have an impact on things like head start. so there are some programs scheduled to be cut that we're using an ax instead of a scalpel. may not always be the smartest cuts. and so that is a piece of

business that still has to be taken care of. and i want to make clear that any agreement we have to deal with these automatic spending cuts that are being threatened for next month, those also have to be balanced because, remember, my principle always has been let's do things in a balanced, responsible way. and that means the revenues have to be part of the equation in turning off the sequester and eliminating these automatic spending cuts as well as spending cuts. now, the same is true for any future deficit agreement. obviously we're going to have to do more to reduce our debt and deficit. i'm willing to do more, but it is going to have to be balanced. we're going to have do it in a balanced responsible way. for example, i'm willing to reduce our government's medicare bills by finding new ways to reduce the cost of health care in this country. that's something that we all should agree on. we want to make sure that medicare is there for future generations. but the current trajectory of

health care costs has gone up so high, we have got to find ways to make sure that it is sustainable. but, that kind of reform has to go hand and hand with doing some more work to reform our tax code. so that wealthy individuals, the biggest corporations, can't take advantage of loopholes and deductions that aren't available to most of the folks standing up here. aren't available to most americans. so there is still more work to be done in the tax code to make it fair, even as we're also looking at how we can strengthen something like medicare. now, if republicans think that i will finish the job of deficit reduction, through spending cuts alone, and you hear that sometimes coming from them, sort of after today we're just going to try to shove only spending c cuts down, you know, well -- shove spending -- shove spending

cuts at us, that will hurt seniors, or hurt students, or hurt middle class families without asking also equivalent sacrifice from millionaires or companies with a lot of lobbyists, et cetera. if they think that's going to be the formula for how we solve this thing, they have another thing coming. we have to do this in a balanced and responsible way and if we're serious about deficit reduction and debt reduction, then it is going to have to be a matter of shared sacrifice. at least as long as i'm president. and i'm going to be president for the next four years, i hope. so -- [ applause ] so anyway, for now -- for now, our most immediate priority is to stop taxes going up for middle class families, starting

tomorrow. i think that is a modest goal that we can accomplish. democrats and republicans in congress have to get this done. but they're not there yet. they are close, but they're not there yet. and one thing we can count on with respect to this congress is that if there is even one second left before you have to do what you're supposed to do, they will use that last second. so as of this point, it looks like i'm going to be spending new year's here in d.c. you all are going to be hanging out in d.c. too. i can come to your house? is that what you said? i don't want to spoil the party. but the -- the people who are with me here today, the people who are watching at home, they need our leaders in congress to

succeed. they need us -- they need us to all state focused on them. not on politics. not on, you know, special interests. they need to be focused on families, students, grandmas, you know, folks who are out there working really, really hard, and are just looking for a fair shot. and some reward for that hard work. they expect our leaders to succeed on their behalf. so do i. so keep the pressure on over the next 12 hours or so, let's see if we can get this thing done. and i thank you, all, and if i don't see you, if i don't show up at your house, i want to wish everybody a happy new year. thank you very much. all right. >> so there he is, the president of the united states, speaking for nearly ten minutes, making the case for a deal. he says an agreement is within sight but it is not done. says it is not done yet. he's hopeful but there is still

some time on the clock that is going to continue. the president also reaching out to -- i assume, some of his fellow democrats, making the case that this is by no means a complete package. he's got more work to do. they will have more work to do. and also going after the republicans making the case that you can't just cut various programs, to come up with a deal, there is going to have to be more tax cuts, more tax revenue coming in, some place down the road, as well. looking at some options there. let me go to dana bash, our senior congressional correspondent. dana, i was sort of surprised that the president came out and gave the speech. obviously it is designed to rally his base, if you will, put pressure on the republicans, but if this is such a sensitive moment, in the negotiations right now, doesn't he risk alienating or irritating a lot of those republicans who are going to need to vote in favor of this deal? >> yes. he certainly could. but i think at this point

they -- both sides, both leaders, leaders in both parties realize they need to make sure that they each corral as many of the members as possible. the other thing is, yes, it is not done, but i am told by republican and democratic sources here it is very, very, very close, that really the only big thing remaining is the fact that they have -- seemed to have agreed to delay the sequester or the mandatory spending cuts for two months and replace it with other spending cuts. the question is what are those spending cuts. so it is just a matter of time, both sides say, before -- we have seen deals like this blow up on matters even smaller sometimes, but that i think is a big reason. and the truth is, wolf, that the vice president and more importantly harry reid and mitch mcconnell would not even come this close. at least when comes to senate votes, to getting a deal this close, i should say, when they

don't think that they have the votes. they simply wouldn't bring it to the floor if they didn't think they had the votes. they realize a failed vote when it comes to spooking the markets is even worse than no vote in going over the cliff. >> is it a done deal, though, if the senate passes it and there is a significant bipartisan majority in the senate? will the speaker of the house, dana, john boehner, allow it to come up for a vote as is in the house of representatives? >> reporter: it's not a done deal, but i will say that the speaker made clear in private and republican sources are telling us as well that if the senate can come up with something, and pass something, he will move to bring it to the house floor. a very different kind of posture that we have seen from the speaker for months and months where he has not wanted to bring anything to the house floor that he did not -- was not sure was going to pass. one interesting kind of wrinkle in what is going on here, wolf, is that deirdre walsh and i have been told it is very unlikely for the house to vote on

anything today, december 31st. more likely to vote tomorrow or the next day. what does that mean technically and politically? it means that tax rates will go up at midnight tonight. so politically it will mean that all the house members would be taking a vote to effectively cut taxes as opposed to raising taxes, which will be a lot easier to swallow, especially for house republicans. i was talking to a house republican source involved in these discussions who said it certainly isn't the reason, the reason is the delay behind me in the senate, but it could be enough to bring over a handful of republicans and a handful, this source says, might be exactly what they need. >> president walking across the street from the eisenhower executive office building into the west wing of the white house after delivering that nearly 10-minute statement. we're going to get republican reaction. much more on the breaking news, a deal is within sight. the president of the united states says, but it is not done yet. much more coverage right after this.